Shanghai Electric, Siemens Invest $226 Million in Wind Power

Dec. 9 (Bloomberg) -- Shanghai Electric Group Co. and
Siemens AG will invest 169.1 million euros ($226 million) to
form two wind-power equipment joint ventures that will include
all of the Chinese company’s business in the industry.

Shanghai Electric will invest 31 million euros for a 51
percent stake in Siemens Wind Power Turbines Shanghai, which
designs and makes turbine components and will be renamed
SmartPower Wind Turbines Shanghai Co., according to a Hong Kong
stock exchange filing yesterday.

It will also invest 53 million euros for 51 percent of a
new venture, Shanghai Electric Wind Energy Co., which will sell
wind equipment. Siemens will invest 85.1 million euros and will
own 49 percent stakes of each company.

Under the terms agreed to by the companies, Shanghai
Electric will transfer all of its wind-power business to the two
joint ventures, according to the filing. The assets to be
transferred will include wind-power projects funded by 563
million yuan ($89 million) of proceeds from a private sale of A-shares in May 2010.

Shanghai Electric will also use 166.7 million yuan of
surplus proceeds from the 2.2 billion-yuan share offering as
working capital, according to the filing.

The number of companies making turbines for offshore
projects may fall to as few as five in a few years, executives
at Siemens and Vestas Wind Systems A/S said last month. In 2010,
four of the 10 biggest turbine suppliers were Chinese, according
to BTM Consult ApS.

The agreements will let Shanghai Electric use Siemens
technology as it seeks to develop offshore wind farms “fast and
safely” and reach “the peak of the domestic offshore wind-power market,” according to a statement yesterday.